Current Mortgage Interest Rates, August 1, 2022 | Tick ​​Down Rates

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In 2022, mortgage rates have nearly reached levels not seen since before the pandemic, after nearly two years of record high rates.
Refinancing or buying your home doesn’t have to be put on hold. Although rates are higher than they were in 2021, 30-year fixed rates are still close to rates a few years ago.

The fact is, a homebuyer’s decision involves more than just an interest rate. It’s a lifestyle decision. Despite the impact of the interest rate market on mortgages, it is not prudent to base your decision on just a few basis points. The most important thing to consider is setting a realistic home buying budget and sticking to it.

Let’s take a look at current mortgage rates, past rates, and what it all means for borrowers.

A variety of notable mortgage rates fell today. The impressive drop in 30-year fixed mortgage rates is making headlines, but let’s not forget the 15-year fixed rates, which have also fallen. At the same time, average 5/1 variable rate mortgage (ARM) rates also declined.

Mortgage rates are currently:

Mortgage rate forecasting: why do mortgage rates change?

Various economic factors have caused mortgage rates to rise this year. Persistently high inflation is a big reason, Jacob Channel, senior economic analyst at LendingTree, told us. According to the Bureau of Labor and Statistics’ Inflation Report for June, inflation recently hit 9.1%, its highest level in 40 years. As inflation remained higher than expected, the Federal Reserve raised its short-term policy rate by 50 basis points in May, then by 75 basis points in June, and the July rate hike is expected to be 75 additional points.

A spike in mortgage rates preceded the Fed’s announcement after the release of the inflation report. “I think what we’re seeing is that lenders had already forecasted the Fed was going to raise the fed funds rate by 75 basis points and they started preemptively pushing up mortgage rates,” we said. says Jacob Channel, senior economist at LendingTree. .

“There are signs that some of the main drivers of inflation are easing, such as the drop in oil and other commodity prices in July, slowing wage growth and easing pressures on the chain. However, service price increases driven by housing and pent-up demand for vehicles will keep inflation high in the coming months,” said Dawit Kebede, senior economist at the Credit Union National Association, in a statement. release Energy prices are half responsible for these increases, he said.

Current Mortgage Rates: Are They Good for Buying a Home Right Now?

Even with the recent dramatic increases, mortgage rates remain at normal levels and are still considered historically favorable.

But the overall cost of home ownership is now rising with rising rates. With a combination of limited supply of homes, prices have risen significantly from pre-pandemic levels. Massive buyer demand and rising home construction costs are also contributing to the surge.

A point or two difference can mean a lot of money on a 30-year mortgage. But experts advise against trying to time the market to get the best mortgage rate. It’s more important to focus on finding the right home and doing it when your personal lifestyle and financial situation indicate that it’s the right time.

Mortgage lender rates can vary widely. In order to get the best deal, shop around between a few different mortgage lenders. Be sure to get quotes from different lenders to ensure you get the best deal, experts say. “The rate has a big impact on your monthly affordability as long as you keep that house,” Skylar Olsen, senior economist at Tomo, a digital real estate and mortgage company, told us. “It’s actually a critical part of that decision, and it requires shopping around.”

Watch out for loan fees

If you’re taking out a mortgage, your decision should factor in loan closing costs. These fees include loan origination fees, prepaid interest and property taxes, and can range from 3-6% of the loan amount. . You can save money in the short term by using this strategy, so don’t overlook it if you plan to sell your home or refinance in five to eight years.

Current Mortgage Refinance Rates

There’s good news if you’re considering a refinance, as the average 15-year and 30-year fixed refinance loan rates have fallen. If you’re considering a 10-year refinance loan, just know that average rates have also come down.

Take a look at today’s refinance rates:

Here are the mortgage rates for different loan styles.

30-year fixed mortgage interest rate

For a 30-year fixed-rate mortgage, the average rate you’ll pay is 5.28%, down 37 basis points from last week.

15-year fixed mortgage interest rate

The median rate for a 15-year fixed mortgage is 4.61%, down 26 basis points from the same time last week.

The monthly payment on a 15-year fixed rate mortgage is, undeniably, a much higher monthly payment than what you would get on a 30-year mortgage offering the same interest rate. However, 15-year loans have significant benefits: you’ll pay thousands less in interest and pay off your loan much faster.

ARM 5/1 tariffs

A 5/1 ARM has an average rate of 4.09%, down 11 basis points from the same time last week.

An ARM is ideal for borrowers who will sell or refinance before the rate changes. If not, their interest rates could end up being significantly higher after a rate adjustment.

For the first five years, a 5/1 ARM will typically have a lower interest rate than a 30-year fixed mortgage. Keep in mind that your rate could increase and your payment could increase by hundreds of dollars per month.

How We Determine Mortgage Interest Rates

To see where mortgage rates are moving, we rely on information collected by Bankrate, which is owned by the same parent company as NextAdvisor. The Daily Rates survey focuses on mortgages where the borrower has a high credit score (740+), a net worth of 20% or more, and lives in the home.

This table shows current average rates based on information provided to Bankrate by lenders nationwide:

Rates correct as of August 1, 2022.

Frequently Asked Questions (FAQ) About Mortgage Rates:

How to get the best mortgage rate?

Shopping around for a mortgage is a great way to qualify for the lowest rate.

Your mortgage rate depends on a variety of factors that lenders take into account when assessing the likelihood of you paying off your home loan. Your credit score is a big part of that decision. And your loan-to-value (LTV) ratio is also important, so having a larger down payment is better for your mortgage rate.

But banks will see your situation differently. So you can provide the same documentation to three different mortgage providers and find that none of the mortgage rates and fees you are offered are the same.

Should I lock in my mortgage rate now?

It is impossible to know which direction mortgage rates will go from one day to the next. That’s why a mortgage rate lock is such a useful tool, because it protects you if rates go up. And since interest rates are relatively low right now, you should lock in your rate as soon as possible.

When you lock your rate, ask your lender how long the lock is valid. A rate lock can be good for 30-60 days, which will usually give you plenty of time to close before the lock expires. If something happens and you need to extend your rate lock, ask about fees, as many lenders charge a fee to extend a rate lock.

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